(Reuters) - The European Commission is considering a plan to cut lucrative debit and credit card transaction fees set by companies including Visa and MasterCard, the Financial Times reported on Tuesday.

The plan stops short of a full-fledged ban on debit card fees, as had been contemplated in earlier versions, but would still come as a setback to the payments industry, the paper reported after seeing the latest revision of the plan.

The European Commission has considered ways to reduce such fees after determining in 2007 that the fees for cards issued in Europe violated competition rules and ultimately raised costs for consumers and merchants.

The latest plan proposes a 0.2 percent cap on all consumer debit as well as credit card transactions, the paper said, with the blanket cap set to be introduced after a two-year transition period during which the ceiling would apply only to cross-border fees.

A European Commission spokesman could not immediately be reached for comment outside regular business hours.

Both MasterCard and Visa Europe, the European licensee of Visa Inc, have already capped their interbank debit and credit card fees at 0.2 percent and 0.3 percent of the value of a transaction, respectively, as part of antitrust deals with the competition regulator.

According to Commission estimates, the proposed cap will cut total debit card fees across the European Union to about 2.5 billion euros ($3.28 billion) from about 4.8 billion euros, the FT said on its website.

Credit card fees will fall to 3.5 billion euros from 5.7 billion euros once the cap is in place, the financial daily said.